Supreme Court: Private universities cannot be run for profit, seeks 5-year financial details
THE JHARKHAND STORY NETWORK New Delhi, September 21: The Supreme Court has said that private universities cannot be operated as profit-making institutions…
THE JHARKHAND STORY NETWORK
New Delhi, September 21: The Supreme Court has said that private universities cannot be operated as profit-making institutions and has directed the Union government, states and Union Territories to obtain detailed financial and administrative information from private universities across the country.
A Bench of Justice Ahsanuddin Amanullah and Justice N.V. Anjaria has sought five years of audited financial records, including details of funds generated and utilised, fee collections, surplus funds and their investments, payments to persons not directly involved in educational functions, and salaries and other emoluments paid to teaching and non-teaching staff.
The directions were issued on September 17, 2026, in proceedings arising from a matter concerning Amity University, Noida, which subsequently expanded into a broader examination of the functioning, regulation and benefits received by private universities across the country. The matter is next scheduled for hearing on November 19, 2026.
Court stresses public purpose of education
The Bench made it clear that private universities may maintain a reasonable financial cushion to ensure their smooth functioning and responsible management, but their resources cannot be diverted for purposes unrelated to education.
The Court observed that education serves a wider public purpose and that private universities cannot be permitted to function merely as commercial enterprises. The Supreme Court’s directions seek greater transparency in the financial and administrative functioning of such institutions.
Five years of financial records sought
The Court has directed that detailed information be collected on the universities’ financial operations for the past five years. This includes funds generated and utilised, fee collections at the time of admission and during courses, additional charges collected under various heads, and the manner in which surplus funds are dealt with.
Details of investments made from surplus funds have also been sought, along with information on payments made to persons who are not directly involved in educational functions.
Admissions, recruitment and teaching also under scrutiny
The universities have also been asked to disclose the procedures followed for student admissions in each course, including the persons responsible for admissions, setting examination papers, conducting examinations and evaluating answer sheets.
Details have also been sought regarding the recruitment of teaching and non-teaching staff, their salaries and service conditions, and the authorities responsible for assigning classes.
The Court has specifically sought information from January 2025 onwards regarding classes allotted to teaching staff, classes actually taken and alternative arrangements made when teachers were unavailable.
Grievance redressal mechanisms to be disclosed
Private universities will also have to provide details of their grievance-redressal mechanisms, including the composition and jurisdiction of relevant committees, the number and nature of complaints received during the past three years, their disposal and the time taken to resolve them.
For universities and colleges linked to hospitals, details regarding the hospitals and the nature of their relationship with the institutions have also been sought.
Government benefits and regulatory inspections
The Court has further directed that details of benefits and concessions received from the Central and state governments be disclosed. These include land allotments, relaxations in existing laws and other special privileges.
Regulatory and affiliating bodies have also been asked to provide details of inspections conducted over the past five years and the faculty and supporting staff considered for recognition or affiliation. The order specifically refers to regulatory bodies covering medical, dental, allied healthcare, nursing, legal, Indian systems of medicine, homoeopathy, veterinary and pharmacy education.
Six weeks given for affidavits
The Union government, states and Union Territories have been directed to obtain the required information from the concerned universities and colleges and file affidavits through their respective Chief Secretaries within six weeks from September 17.
The proceedings mark a wider judicial examination of the functioning of private universities, with the Supreme Court seeking greater transparency in fees, finances, admissions, faculty recruitment, academic standards, grievance redressal and regulatory compliance.
